Article 7 Penal Assessments of State-Assessed Property [Repealed]

Chapter 4. Assessment by State Board of Equalization Generally

Article 1. General Provisions*

721. Valuation and assessment. The board shall annually value and assess all of the taxable property within the state that is to be assessed by it pursuant to Section 19 of Article XIII of the Constitution and any legislative authorization thereunder.

Construction.—Under this section, the Board has the constitutional authority to assess railroads' properties, and the trial court is precluded from substituting its judgment for the Board's on questions of fact or discretionary appraisal decisions. A remand to the Board is generally required when the determination of refunds is dependent upon an exercise of valuation functions and does not involve mere mathematical computations. However, a limited remand rather than a broad, de novo remand to the Board is appropriate if the Board has failed to address or consider a specific question or questions. Union Pacific Railroad Co. v. State Board of Equalization, 231 Cal.App.3d 983.

Public utility property.—Although the Board followed a published policy of valuing public utility property at not more than its reproduction cost new less depreciation (RCNLD), it was free to alter its method of assessing such property subject to the requirements of fairness and uniformity. An assessment based primarily upon the capitalization of income method and exceeding RCNLD is not necessarily in excess of the value of a taxpayer's property and does not necessarily constitute a tax on a taxpayer's franchise in violation of Article XIII, Section 19 of the Constitution. ITT World Communications, Inc. v. Santa Clara County, 101 Cal.App.3d 246. The Board was not entitled to use historical cost when valuing a railroad's property. The railroad, although regulated by the Interstate Commerce Commission, did not use historical cost as a rate base; and the conditions precedent to the Board's use of historical cost had not been met, and it was a violation of the Board's own property tax rule 3(d) to do so. Southern Pacific Transportation Co. v. State Board of Equalization, 191 Cal.App.3d 938.

Pipeline property.—While Article XIII, Section 19 of the Constitution allows for the unit taxation of all public utility property, only those items deemed to constitute a private, intercounty pipeline may be assessed by the Board, including enumerated mechanical parts, fittings, and tanks necessary to the pipeline's operation. Real property interests, land and rights-of-way, are excluded from the definition of a pipeline. Similarly, specific facilities, including a products plant, a wharf and a marine terminal, engaged in multiple uses were not essential to the operations of intercounty pipelines that terminated there and thus, were not parts of the pipelines which the Board could assess. Southern Pacific Pipe Lines, Inc. v. State Board of Equalization, 14 Cal.App.4th 42.

Composite life model.—The trial court erred in concluding that the Board's composite life model, a variant of the limited life technique used to assess railroads' operating assets, violated property tax rule 8(c), in that it failed to include in gross outgo the capital expenditures (costs of replacements in kind) necessary to maintain the estimated income. Property tax rule 8(b) specifically allows the use of a limited life model, and when a limited life model is used, rule 8(c) must be read as requiring only the deduction of capital expenditures needed to maintain the estimated income for the limited lifetime. The trial court did not err, however, in concluding that the composite life/no replacement cost model depended on assumptions that were so unrealistic when applied to railroad properties as to insure that the value estimate would be unreliable. The model rested on a central unsupported and untestable assumption: that future capital replacements would, in general, earn at least their capital cost. It was assumed that investments and replacements would be discretionary with future management, and would not be made if they would not earn enough to justify the cost. However, because of two characteristics of the railroad industry—mandated reinvestment and economic integration of assets—it was incorrect to assume, as the Board did, that future investment in replacements would always "pay their own way." Union Pacific Railroad Co. v. State Board of Equalization, 231 Cal.App.3d 983.

Valuation method.—Since no single method of the three generally used by assessors in determining the "full value" of property (market data on sales of similar property, replacement cost, and income from the property) alone can be used to estimate the value of all property, an assessor, subject to requirements of fairness and uniformity, may exercise his discretion in using one or more of them. ITT World Communications, Inc. v. Santa Clara County, 101 Cal.App.3d 246. Southern Pacific Transportation Co. v. State Board of Equalization, 191 Cal.App.3d 938; Los Angeles SMSA Ltd. Partnership v. State Board of Equalization, 11 Cal.App.4th 768. A valuation methodology used to assess tangible property that did not satisfactorily account for the value of the taxpayer's intangible assets was invalid. Intangible assets are not subject to property taxation, although their value may be included in the valuation of otherwise taxable tangible property. The Board erred in assuming that unit valuation, especially when calculated by the capitalized earnings ability method, necessarily taxed only the intangible values as they enhanced the tangible property. Such obscured the Board's duty to exclude intangible assets from assessment. GTE Sprint Communications Corp. v. Alameda County, 26 Cal.App.4th 992.

Notice.—An assessment notice must disclose to a taxpayer the methods of valuation and the method or methods actually used to determine the amount of assessment, sufficient to permit the taxpayer to challenge the assessment in an administrative proceeding. Southern Pacific Transportation Co. v. State Board of Equalization, 191 Cal.App.3d 938.

Income from enterprise activity.—Where a capitalized earnings approach is used in valuing property, income derived in large part from enterprise activity, which is subject to income taxation, may not be ascribed to the property being appraised. ITT World Communications, Inc. v. Santa Clara County, 101 Cal.App.3d 246.

721.5. Electric generation facilities. (a) (1) Notwithstanding Section 721 or any other provision of law to the contrary, commencing with the lien date for the 2003–04 fiscal year, the board shall annually assess every electric generation facility with a generating capacity of 50 megawatts or more that is owned or operated by an electrical corporation, as defined in subdivisions (a) and (b) of Section 218 of the Public Utilities Code.

(2) For purposes of paragraph (1), "electric generation facility" does not include a qualifying small power production facility or a qualifying cogeneration facility within the meaning of Sections 201 and 210 of Title II of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Secs. 796(17), (18) and 824a-3), and the regulations adopted for those sections under that act by the Federal Energy Regulatory Commission (18 C.F.R. 292.101–292.602).

(b) This section shall be construed to supersede any regulation, in existence as of the effective date of this section, that is contrary to this section.

Construction.—The Board's assessment jurisdiction extends to all entities that can be considered "public utilities" under Article XIII, Section 19, regardless of whether they are regulated by the California Public Utilities Commission. Where the electric generation facilities supply electricity to the general public, they are considered to have made a dedication of their property to the public so as to be considered a public utility. Public utilities, which include all independent electric generation facilities that have dedicated their property to public use, are subject to unit valuation under this section. Such property is valued annually by the Board at its fair market value, and not valued based upon the limitations imposed on the assessment of real property by Article XIII A, Section 3. Independent Energy Producers Assn., Inc. v. State Bd. of Equalization (2004) 125 Cal.App.4th 425.

Constitutionality.—The change in assessment of independent electric generation facilities from local assessment to the Board does not violate Proposition 13 because the California Supreme Court has held that Proposition 13's restrictions on taxation of real property have no application to the unit taxation of public utility property under Article XIII, Section 19. Independent Energy Producers Assn., Inc. v. State Bd. of Equalization (2004) 125 Cal.App.4th 425.

Note.—Section 3 of Stats. 2002, Ch. 57 (AB 81) provided that this act shall not be construed to affect the manner in which property to which this act applies is assessed by the State Board of Equalization. Section 4 thereof provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

722. Ratio of assessed to full value. State-assessed property shall be assessed at its fair market value or full value as of 12:01 a.m. on the first day of January. The board shall annually prepare an assessment roll of the assessments made by it for transmittal to county auditors and city auditors as hereinafter provided in this chapter.

722.5. Local and State assessment dates. (a) Real property assessed by the board pursuant to Section 19 of Article XIII of the California Constitution on January 1, which thereafter becomes subject to local assessment, shall not be assessed locally during the remainder of the assessment year, except as provided in Chapter 3.5 (commencing with Section 75) of Part 0.5 of Division 1.

(b) Personal property that becomes subject to board assessment after January 1, and real property that becomes subject to board assessment on or after January 1, and on or before the following January 1, shall not be state assessed until the assessment year commencing on the latter January 1.

History.—Added by Stats. 1986, Ch. 1457, in effect January 1, 1987. Stats. 1987, Ch. 921, in effect September 22, 1987, added the second sentence to subdivision (a). Stats. 1996, Ch. 499, in effect January 1, 1996, operative January 1, 1997, substituted "assessment year" for "local assessment year commencing within 60 days after January 1" after "remainder of the" in the first sentence, and deleted "For the purposes of Section 75.11, real property which becomes subject to local

assessment after January 1 and before the following March 1 shall be deemed to be subject to local assessment as of March 1.", the former second sentence of subdivision (a); deleted former subdivision (b) which read: "Real property which becomes subject to board assessment pursuant to Section 19 of Article XIII of the California Constitution as the result of a lease, a purchase, a change in ownership, or the creation of a possessory interest after January 1 and before the following March 1 shall be deemed to be subject to board assessment as of January 1."; and relettered former subdivision (c) as (b), substituted "that" for "which" after "real property", and substituted "January" for "March" after "on or after" in subdivision (b).

Note.—Section 8 of Stats. 1987, Ch. 921, provided that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the Legislature finds and declares that there are savings as well as costs in this act which, in the aggregate, do not result in additional net costs.

723. Use of principle of unit valuation. The board may use the principle of unit valuation in valuing properties of an assessee that are operated as a unit in a primary function of the assessee. When so valued, those properties are known as "unitary property." Property of an assessee not valued through the use of the principle of unit valuation are known as "nonunitary property." When valuing nonunitary property, the board shall consider current market value information of comparable properties provided by the assessor just prior to the reappraisal by the board of that property.

History.—Stats. 1983, Ch. 694, in effect January 1, 1984, substituted "those" for "such" after "valued," in the second sentence, and added the fourth sentence.

Construction.—Unit taxation of public utilities and railroads is properly characterized as the taxation of property as a going concern, not as the taxation of real property or personal property, or even a combination of both. Under the unit taxation method, the Board considers the earnings of the property as a whole, and does not consider, less still assess, the value of any single real or personal asset. Union Pacific Railroad Co. v. State Board of Equalization;GTE Sprint Communications Corp. v. Alameda County, 26 Cal.App.4th 992. 49 Cal.3d 138. The Board properly assessed a cellular company as a unit at its highest and best use, undifferentiated into separate types of assets. It has long been recognized that a public utility property cannot be regarded as merely land, buildings, and other assets. Rather, its value depends on the interrelation and operation of the entire utility as a unit. Thus, the Board was not required to attempt to isolate and separately value the company's Federal Communications Commission station authorization or to deduct any amount from the company's unitary value. Los Angeles SMSA Ltd. Partnership v. State Board of Equalization, 11 Cal.App.4th 768.

723.1. Operating nonunitary properties. Operating nonunitary properties are those that the assessee and its regulatory agency consider to be operating as a unit, but the board considers not part of the unit in the primary function of the assessee. This section does not apply to state-assessed property of regulated railway companies. In the case of regulated railway companies, there shall be only two classifications of property for purposes of this code, unitary and nonunitary.

724. Timely performance. Whenever any act is required or allowed to be done on or before a date specified in this chapter and that day is a Saturday, Sunday or holiday, the act may be performed timely during the next following business day.

725. Validity of assessment or taxes. The failure to receive any notice required to be given by the board or the failure of the board to complete any action by a date specified under this chapter, shall not affect the validity of an assessment or the validity of any taxes levied pursuant thereto. When any notice given by the board pursuant to this chapter provides for a time period of less than 10 days, the notice shall also be communicated by telephone on the day the notice is dated.

Article 2. Assessments*

731. Notification of assessment; unitary property. Each year between the first day of January and the first day of June, upon valuing the unitary property of an assessee, the board shall mail to the assessee, at its address as shown in the records of the board, a notice stating the amount of the assessed value of the assessee's unitary property. The notice shall advise the assessee that a petition for reassessment of the unitary property may be filed, not later than July 20 of the year of the notice, at the headquarters of the board in Sacramento.

History.—Stats. 1980, Ch. 1208, in effect January 1, 1981, deleted "full value and" before "assessed value" in the first paragraph. Stats. 1981, Ch. 1132, in effect January 1, 1982, added "declaration of intent to petition for reassessment, and the date by which and place where a" before "petition" in the second sentence; and added "for filing of the declaration of intent" after the first "date", substituted "20" for "10" before the first "days", and added the balance of the sentence after "notice" in the third sentence. Stats. 1986, Ch. 1457, effective January 1, 1987, substituted "January" for "March" after "day of" in the first sentence. Stats. 2000, Chap. 647 (SB 2170), in effect January 1, 2001, substituted "that" for "of the date by which and the place where a declaration of intent to petition for reassessment, and the date by which and place where" after "the assessee" and added ", not later . . . in Sacramento" after "filed" in the second sentence, and deleted the former third sentence, which provided "The date for filing of the declaration of intent shall not be less than 20 days from the date of the mailing of the notice of value and the date for filing the petition shall not be less than 30 days from the date set for filing the declaration of intent to petition.".

732. Notification of assessment; nonunitary property. Each year between the first day of January and the last day of July, upon valuing the nonunitary property of an assessee, the board shall mail to the assessee at its address shown in the records of the board a notice stating the amount of the assessed value of the assessee's nonunitary property. The notice shall advise the assessee that a petition for reassessment of the nonunitary property may be filed, not later than September 20 of the year of the notice, at the headquarters of the board in Sacramento.

History.—Stats. 1981, Ch. 1132, in effect January 1, 1982, added "declaration of intent to petition for reassessment, and the date by which and place where a" before "petition" in the second sentence; and added "for filing of the declaration of intent" after the first "date," substituted "20" for "10" before the first "days," and added the balance of the sentence after "notice" in the third sentence. Stats. 1986, Ch. 1457, effective January 1, 1987, substituted "January" for "March" after "day of" and "June" for "July" after "day of" in the first sentence. Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, substituted "July" for "June" after "day of" in the first sentence, substituted "that" for "of the date by which and the place where a declaration of intent to petition for reassessment, and the date by which and place where" after "the assessee", added ", not later than . . . in Sacramento" after "filed" in the second sentence, and deleted the former third sentence which provided, "The date for filing of the declaration of intent shall not be less than 20 days from the date of the mailing of the notice of value and the date for filing the petition shall not be less than 30 days from the date set for filing of the declaration of intent to petition.".

733. Finality of assessment. (a) If a timely petition for reassessment is not filed with the board, an assessment of unitary or nonunitary property of the assessee shall become final at the expiration of the period specified for filing a petition in the notice given in accordance with Section 731 or Section 732.

(b) The board may extend the period for filing a petition for reassessment once for a period not to exceed 15 days, provided a written request for the extension is filed with the board prior to the expiration of the period for which the extension may be granted.

History.—Stats. 1981, Ch. 1132, in effect January 1, 1982, added the first paragraph; added "after a.......filed, a" after "If", and added "for filing a petition" after "specified" in the second paragraph; and added the third paragraph. Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, deleted the former first paragraph which provided, "If the assessee fails to file a declaration of intent to file a petition for reassessment within the period specified in the notice mailed by the board in accordance with Section 731 or Section 732, an assessment of unitary or nonunitary property of the assessee shall become final at the expiration of the period specified. If the assessee files a petition for reassessment within the period specified for filing a declaration of intent to petition, no declaration of intent need be filed."; lettered the former second paragraph as subdivision (a) and deleted ", after a declaration of intent to file a petition has been timely filed," after "If" and substituted "the" for "an" after "property of" therein; and lettered the former third paragraph as subdivision (b).

Article 3. Reassessments and Allocation Corrections*

741. Petition for reassessment. A petition for reassessment of unitary or nonunitary property shall be in writing and shall state the specific grounds upon which it is claimed a correction or adjustment of the assessment is founded. The petition shall be delivered to the board at its headquarters office in Sacramento.

Burden of Proof.—Before the Board, the assessing officers are presumed to have properly performed their duties, and the taxpayer has the burden of showing that an assessment is not fair and equitable. The assessor is not required to go forward with any evidence, but may stand on the presumption of correctness of the assessment. ITT World Communications, Inc. v. Santa Clara County, 101 Cal.App.3d 246.

742. Hearing on petition for reassessment. Upon receipt of a timely petition for reassessment, the board shall set a time and place within the state for hearing on the petition. Notice thereof shall be mailed to the assessee at its address as shown in the records of the board, not less than 10 working days in advance of the date of the hearing.

History.—Stats. 1988, Ch. 821, in effect January 1, 1989, substituted "10 working" for "five" in the second sentence.

Scope of review.—The trial court did not err in admitting evidence regarding application of the Board's valuation methods used for railroads' properties beyond that contained in the administrative record and in deciding the primary question of validity of the methods de novo, where the railroads' central claim was that the valuation methods employed by the board were fundamentally inappropriate for the assessment of railroad operating assets. Where the claim is that, due to the basic undisputed characteristics shared by an entire class of properties, the challenged method will produce systematic errors if applied to properties in that class, the issue is legal, not factual. Union Pacific Railroad Co. v. State Board of Equalization, 231 Cal.App.3d 983.

Preponderance of evidence.—Board, at railroad reassessment hearings, did not fail to adhere to a preponderance of the evidence standard. Chief Counsel's advice that assessees' burden was "weight of the evidence, for example, more than 50 percent proof," described, in lay terms, the concept of a preponderance of evidence, and there was no evidence that the Board was systematically imposing a higher burden on railroads. Union Pacific Railroad Co. v. State Board of Equalization, 231 Cal.App.3d 983.

743. Continuance of hearing; record; transcript. The hearing may be continued by the board for good cause. The hearing shall be open to the public, except that upon conclusion of the taking of evidence the board may deliberate in private with the aid of its staff in reaching a conclusion. Upon written request, the board shall make a full record of the hearing and furnish the petitioner with a transcript thereof at the petitioner's expense.

History.—Stats. 1981, Ch. 261, in effect January 1, 1982, deleted "made in advance of the hearing" after "request" in the third sentence.

744. Notification of decision; findings and conclusions. (a) The board shall notify the petitioner of its decision on a petition for reassessment by mail and shall make written findings and conclusions if requested at or prior to the commencement of the hearing. The board shall send a periodic report of its decisions and any written findings and conclusions thereon to each county in which affected state-assessed property is situated. The findings shall fairly disclose the board's determination of material factual issues and shall contain a statement of the method or methods of valuation used by the board in valuing the property. Notwithstanding the requirement for a statement of method or methods, the board's approval of a settlement of a lawsuit contesting the value of state-assessed property shall be sufficient disclosure when value is determined in accordance with a board-approved settlement. Decisions of the board on petitions for reassessment of state-assessed property shall be completed on or before December 31.

(b) When the value of an assessee's state-assessed property is determined, after a hearing on a petition for reassessment, to be different from the value originally adopted by the board, the board shall determine the year in which the corrected value is to be entered on the roll. The correct value may be entered on the roll for the fiscal year in which the determination is made, or the difference between the original and the corrected value may be entered as an increase or decrease in the assessment for the succeeding fiscal year. If the corrected value is entered on the roll for the fiscal year in which it is determined, and the board roll has been transmitted to the county auditors, the board shall make the corresponding changes in allocations and transmit the roll corrections to the county auditor.

(c) If the amount of the correction is to be entered on the roll for the succeeding fiscal year, an amount is to be added in lieu of interest. If the correction results in a reduction in assessed value, there shall be added to the reduction, in lieu of interest, 9 percent of the difference between the original assessed value and the reduced assessed value. If the correction results in an increase in assessed value, there shall be added to the increase, in lieu of interest, 9 percent of the difference between the original assessed value and the increased assessed value.

History.—Stats. 1981, Ch. 1132, in effect January 1, 1982, added the subdivision letters; added "both" before and "and nonunitary" after "unitary", and substituted "December 31" for "June 30, and decisions on petitions for reassessment of nonunitary property shall be completed on or before August 19" in the third sentence of subdivision (a); and added subdivisions (b) and (c). Stats. 1987, Ch. 1262, in effect January 1, 1988, added the second sentence in subdivision (a), and substituted "state-assessed" for "both unitary and nonunitary" after "reassessment of" in the fourth sentence thereof; and substituted "state-assessed" for "unitary or nonunitary" after "assessee's" in the first sentence of subdivision (b). Stats. 1992, Ch. 603, in effect September 9, 1992, added the fourth sentence "Notwithstanding the requirement . . . board-approved settlement." to subdivision (a). Stats. 1995, Ch. 497, in effect January 1, 1996, substituted "periodic report of its decisions" for "copy of its decision" after "shall send a" and deleted "the" after "county in which" in the second sentence of subdivision (a).

Findings.—Findings merely affirming an assessment and informing the taxpayer that the Board had before it the same staff-calculated value indicators as those provided in the notice of assessment, which also failed to specify the method or methods of valuation used by the Board, and not revealing whether the Board relied on some or all of the value indicators did not comply with the explicit statutory right to findings in subdivision (a) of this section. Southern Pacific Transportation Co. v. State Board of Equalization, 191 Cal.App.3d 938.

Judicial Review.—Against a claim that a valid valuation method has been applied erroneously, the Board's decision is equivalent to a trial court determination, and the court may review only the record presented to the Board and may overturn the Board's decision only when no substantial evidence supports it. Where a taxpayer challenges the validity of a valuation method itself, the court must determine as a question of law whether the challenged method is arbitrary, in excess of discretion, or in violation of standards prescribed by law. ITT World Communications, Inc. v. Santa Clara County, 101 Cal.App.3d 246. Southern Pacific Transportation Co. v. State Board of Equalization, 191 Cal.App.3d 938; GTE Sprint Communications Corp. v. Alameda County, 26 Cal.App.4th 992.

745. Assessment; placement on roll. The assessment of the unitary and operating nonunitary property of an assessee shall be allocated to assessments on the roll prepared by the board among the counties in which parts of the unitary and operating nonunitary property are situated. The assessment of the nonunitary property of an assessee shall be placed on the assessment roll prepared by the board.

History.—Stats. 1981, Ch. 1132, in effect January 1, 1982, deleted "When" before "the assessment" at the beginning of, and deleted "has become final, it" after "assessee" in both the first and second sentences. Stats. 1986, Ch. 1457, effective January 1, 1987, added "and operating nonunitary" after "unitary" in two places and substituted "counties" for "taxing jurisdictions" after "among the" in the first sentence.

746. Notification of proposed allocated assessed values of unitary property. Each year, upon or prior to the completion of the assessment roll prepared by the board, but not later than June 15, the board shall mail notice to each assessee at its address as shown on the records of the board, of the allocated assessed values of the assessee's unitary property that have been or are proposed to be placed on the assessment roll to be transmitted to county auditors. The notice shall advise the assessee that a petition for a correction of an allocated assessment may be filed, not later than July 20 of the year of the notice, at the headquarters of the board in Sacramento.

History.—Stats. 1995, Ch. 497, in effect January 1, 1996, substituted "county auditors" for "the several county auditors and city auditors" after "transmitted to" in the first sentence and substituted "that" for "such" after "notice, and in" in the fourth sentence. Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, added "Each year," before "upon" and added "but not later than June 15," after "the board," in the first sentence, substituted "advise the assessee that a" for "include a statement of the date by which and the place where the assessee may" after "notice shall" and added "may be filed, not later than July 20 of the year of the notice, at the headquarters of the board in Sacramento" after "assessment" in the second sentence, and deleted the former third and fourth sentences which provided, "The date shall not be less than five days from the date of mailing of the notice. The time and place for hearing, in the event a petition is to be filed, may be stated in the notice, and in that case the time for the hearing shall not be less than 10 days from the date of the mailing of the notice of the allocated assessed values.".

747. Petition for correction of allocated assessment. A petition for correction of an allocated assessment shall be in writing and state the specific grounds upon which it is claimed a correction or adjustment in the allocation is founded. The value of the total unitary property of an assessee may not be brought into issue in a petition for correction of an allocated assessment.

748. Hearing on petition for correction of allocated assessment. Upon receipt of a timely petition for correction of an allocated assessment, the board shall set a time and place within the state for hearing on the petition. Notice thereof shall be mailed to the assessee at its address as shown on the records of the board not less than 10 working days in advance of the date of the hearing.

History.—Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, substituted "on the petition." for ", if it has not done so in the notice given under Section 746, and shall mail" after "hearing" in the first sentence, created the second sentence with the balance of the former first sentence after "Notice", added "thereof shall be mailed" before "to the assessee", deleted "of the time and place of the hearing" after "assessee," and added "not less than 10 working days in advance of the date the hearing." after "the board" therein, and deleted the former second sentence which provided, "The time for the hearing shall not be less than five days from the date of mailing of the notice.".

749. Record; transcript. Section 743 shall be applicable to hearings on petitions for correction of an allocated assessment and the board shall notify the petitioner of its decision by mail. The decision shall include written findings and conclusions of the board if requested at or prior to the commencement of the hearing. Decisions of the board on petitions for correction of an allocated assessment shall be completed on or before December 31.

History.—Added by Stats. 1976, Ch. 877, in effect January 1, 1977. Stats. 1986, Ch. 1457, in effect January 1, 1987, deleted "of this article" after "Section 743", and substituted "July 31" for "August 19" in the first sentence. Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, deleted "prior to July 31" after "by mail" in the first sentence and added the third sentence. Stats. 1986, Ch. 1457, in effect January 1, 1987, deleted "of this article" after "Section 743", and substituted "July 31" for "August 19" in the first sentence. Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, deleted "prior to July 31" after "by mail" in the first sentence and added the third sentence. Stats. 2001, Ch. 744 (SB 1182), in effect January 1, 2002, substituted "allocated" for "unallocated" after "correction of an" in the third sentence of the first paragraph.

Article 4. Assessment Estimates and Assessment Roll*

755. Transmission of estimates of total assessed values to county auditors. (a) On or before July 15, the board shall transmit to each county auditor an estimate of the total unitary value and operating nonunitary value of state-assessed property in the county and of nonunitary state-assessed property in each revenue district in the county. An estimate need not be made for a revenue district that did not levy a tax or assessment during the preceding year unless the board receives on or before January 1 preceding the fiscal year for which the levy is to be made a notice in writing of the proposed levy. The estimate shall be regarded as establishing the total assessed value of state-assessed property in the county and each revenue district in the county for the purpose of determining tax rates, subject only to those changes as may be transmitted on or prior to July 31. All information furnished pursuant to this section is at all times during office hours open to inspection by any interested person or entity.

(b) Notwithstanding subdivision (a), in making the estimate referred to in subdivision (a), the value of property described in paragraph (1) of subdivision (a) of Section 100.1 and the nonunitary value of the property of regulated railway companies, property subject to subdivisions (i), (j), (k), and (l) of Section 100, and property subject to Section 100.9 shall be allocated by revenue district.

(c) The amendments made to this section by the act that added this subdivision apply for the 2007–08 fiscal year and for each fiscal year thereafter.

History.—Added by Stats. 1976, Ch. 877, p. 1993, in effect January 1, 1977. Stats. 1986, Ch. 1457, in effect January 1, 1987, substituted "July 15," for "August 7", after "before", substituted "unitary" for "assessed", after "total", and added "of nonunitary state-assessed property" after "and" in the first sentence; and substituted "July 31" for "August 19" after "prior to" in the third sentence. Stats, 1987, Ch. 921, in effect September 22, 1987, added "(a)" before the first paragraph, and added "and operating nonunitary value" after "unitary value" in the first sentence thereof; and added subdivision (b). Stats. 2002, Ch. 775 (SB 2092), in effect January 1, 2003, substituted "those" for "such" after "subject only to" in the third sentence, and substituted "by" for "of" after "open to inspection" in the fourth sentence of subdivision (a); and substituted "subdivisions (i), (j), and (k) of Section 100" for "subdivision (i) of Section 98.9" after "property subject to" in the first sentence of subdivision (b). Stats. 2005, Ch. 264 (SB 555), in effect January 1, 2006, substituted a comma for "and" after "railway companies" and added ", and property subject to Section 100.9" after "of Section 100" in the first sentence of subdivision (b). Stats. 2006, Ch. 791 (AB 2670), in effect January 1, 2007, added " the value of property described in paragraph (1) of subdivision (a) of Section 100.1" after "in subdivision (a),"and substituted "and the nonunitary value" for "and the unitary value and nonunitary value" before "of the property of regulated railway" in the first sentence of subdivision (b) and added subdivision (c). Stats. 2010, Ch. 433 (AB 308), in effect September 29, 2010, substituted "(k), and (l)" for "(j), and (k)" after "subdivisions (i)," in the first sentence of subdivision (b).

Note.—Section 8 of Stats. 1987, Ch. 921, provided that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the Legislature finds and declares that there are savings as well as costs in this act which, in the aggregate, do not result in additional net costs.

756. Transmission of rolls to county auditors. (a) On or before July 31, the board shall transmit to each county auditor a roll showing the unitary and operating nonunitary assessments made by the board in the county and the nonoperating nonunitary assessments made by the board in each city and revenue district in the county; provided, however, that the roll need not show the assessments made by the board in a revenue district which did not levy a tax or assessment during the preceding year. The roll is at all times, during office hours, open to the inspection of any person representing any taxing agency or revenue district, or any district described in Section 2131. If the roll does not show the assessments in a revenue district as herein provided and a notice of a proposed levy is furnished to the board in writing, on or before January 1 preceding the fiscal year for which the levy is to be made, the board shall furnish an estimate of the total assessed value of nonoperating nonunitary state-assessed property in the district and shall transmit thereafter to the county auditor a statement of roll change showing the nonoperating nonunitary assessments made by the board in the district.

(b) Notwithstanding subdivision (a), in making the roll referred to in subdivision (a), the value of property described in paragraph (1) of subdivision (a) of Section 100.1 and the nonunitary value of the property of regulated railway companies, property subject to subdivisions (i), (j), (k), and (l) of Section 100, and property subject to Section 100.9 shall be enrolled by revenue district.

(c) The amendments made to this section by the act that added this subdivision apply for the 2007–08 fiscal year and for each fiscal year thereafter.

History.—Original section, consisting of first clause only, provided for transmission of roll to county auditors. Stats. 1945, p. 977, in effect September 15, 1945, added remainder of section. Stats. 1966, p. 590 (First Extra Session), in effect October 6, 1966, added the second sentence relative to inspection of the roll. Stats. 1974, Ch. 312, p. 625, in effect January 1, 1975, substituted "On or before August 19" for "immediately after the third Monday in August" in the first sentence, and added "on or before January 1 preceding the fiscal year for which the levy is to be made," after "in writing," in the third sentence. Stats. 1986, Ch. 1457, effective January 1, 1987, substituted "July 31" for "August 19", after "before", added "unitary" after "showing the", and added "the nonunitary assessments made by the board" after "the county and" in the first sentence; added "nonunitary" after "total assessed value of" and after "change showing the" in the third sentence; and deleted the former fourth sentence. Stats. 1987, Ch. 921, in effect September 22, 1987, added "(a)" before the first paragraph; added "and operating nonunitary" after "the unitary", and added "nonoperating" after "county and the" in the first sentence and added "nonoperating" after "total assessed value of" and after "change showing the" in the third sentence of subdivision (a); and added subdivision (b). Stats. 2002, Ch. 775 (SB 2092), in effect January 1, 2003, substituted "The" for "Such" before "roll is at" in the second sentence of subdivision (a) and substituted "subdivisions (i), (j), and (k) of Section 100" for "subdivision (i) of Section 98.9" after "property subject to" in the first sentence of subdivision (b). Stats. 2005, Ch. 264 (SB 555), in effect January 1, 2006, substituted a comma for "and" after "railway companies" and added ", and property subject to Section 100.9" after "of Section 100" in the first sentence of subdivision (b). Stats. 2006, Ch. 791 (AB 2670), in effect January 1, 2007, added "to" after "levy is furnished" in the third sentence of subdivision (a); added "the value of property described in paragraph (1) of subdivision (a) of Section 100.1" after "in subdivision (a),"and substituted "and the nonunitary value" for "and the unitary value and nonunitary value" before "of the property of regulated railway" in the first sentence of subdivision (b) and added subdivision (c). Stats. 2010, Ch. 433 (AB 308), in effect September 29, 2010, substituted "(k), and (l)" for "(j), and (k)" after "subdivisions (i)," in the first sentence of subdivision (b).

Note.—Section 8 of Stats. 1987, Ch. 921, provided that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the Legislature finds and declares that there are savings as well as costs in this act which, in the aggregate, do not result in additional net costs.

758. Assessment of escaped property or roll correction. If the board roll has been transmitted to the local auditors, the board may make an assessment of escaped property or a roll correction. At least 30 days prior to transmitting a statement of assessment of escaped property or making a roll correction, the board shall notify the assessee whose property's full value has increased as a result of an escape assessment or roll correction of the assessed value of that property as it shall appear on the corrected roll. The notice shall be mailed to the assessee at its address shown in the records of the board. The notice shall advise the assessee of the date by which and the place where a petition for reassessment may be filed. The date for filing the petition shall not be less than 50 days from the date of the mailing of the notice of value. The provisions of Sections 741 to 744, inclusive, shall be applicable to petitions and hearings pursuant to this section except for the dates prescribed for decisions of the board.

History.—Added by Stats. 1976, Ch. 877, p. 1994, in effect January 1, 1977. Stats. 1982, Ch. 1465, in effect January 1, 1983, substituted the fourth and fifth sentences for "The assessee shall be heard by the board on a petition for reassessment prior to transmission to the local auditors of the board's statement of assessment of escaped property or roll correction if the assessee files with the board a written petition and request for hearing within 10 days of the date of mailing of the notice." Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, deleted "declaration of intent to petition for reassessment, and the date by which and the place where a" after "place where a" in the fourth sentence, and substituted "the petition shall not be less than 50 from the date of the mailing of the notice of value." for "of the declaration of intent shall not be less than 20 days from the date of the mailing of the notice of value and the date for filing the petition shall not be less than 30 days from the date set for filing the declaration of intent to petition." after "filing" in the fifth sentence.

759. Finality of assessment. (a) If a timely petition for reassessment is not filed in accordance with the notice provided by the board pursuant to Section 758, an escape assessment or roll correction shall become final at the expiration of the period for filing a petition for reassessment specified by that notice.

(b) The board may extend the period for filing a petition for reassessment once for a period not to exceed 15 days, provided a written request for the extension is filed with the board prior to the expiration of the period for which the extension may be granted.

History.—Added by Stats. 1991, Ch. 646, in effect January 1, 1992. Stats. 2000, Ch. 647 (SB 2170), in effect January 1, 2001, deleted former subdivision (a), which provided "If the assessee fails to timely file a declaration of intent to petition for reassessment in accordance with the notice provided by the board pursuant to Section 758, an escape assessment or roll correction shall become final at the expiration of the period for the filing of a declaration of intent specified by that notice. If the assessee files a petition for reassessment within the period specified for filing a declaration of intent, no declaration of intent shall be required."; relettered former subdivision (b) as subdivision (a), and substituted "If a timely" for "If, following the timely filing of a declaration of intent to petition for reassessment, a" before "petition for" and deleted "timely" after "is not" in the first sentence therein; and relettered former subdivision (c) as (b), and substituted "period for which the extension may be granted" for "noticed period for filing a petition for reassessment" after "of the" in the first sentence therein.

760. Collection of delinquent taxes. (a) If any amount assessed by the board becomes delinquent on the secured roll, the tax collector may utilize those procedures for the collection of taxes on the unsecured roll to collect the amount assessed by the board.

(b) Not less than 60 days prior to initiating procedures applicable to the collection of delinquent taxes on the unsecured roll pursuant to this section, the tax collector shall send a notice of delinquency stating intent to enforce collection.

(c) The notice required by subdivision (b) shall set forth the following information:

(1) The name of the assessee.

(2) The description of the property assessed.

(3) The assessed value of the property.

(4) The fact that collection will be enforced on the unsecured roll in the amount of the tax, penalty, interest and actual costs of collection.

History.—Added by Stats. 1992, Ch. 523, in effect January 1, 1993. Stats. 2000, Ch. 116 (AB 1991), in effect January 1, 2001, lettered the former first paragraph as subdivision (a), and substituted "any" for "an" after "If", and deleted "on fixtures and personal property only" after "the board" therein; and added subdivisions (b) and (c).

Article 5. Property Statements*

826. Property statement. Upon request of the board, a person shall submit a property statement pertaining to any state-assessed property owned, claimed, possessed, used, controlled, or managed by him, in the form prescribed by the board.

(a) The statement shall be made under oath and filed with the board.

(b) In the case of a corporation, the property statement shall be signed either by an officer of the corporation or an employee or agent who has been designated in writing by the board of directors to sign such statement on behalf of the corporation.

828. Information. Any person with knowledge or records pertinent to the appraisal of state-assessed property shall make them available to the board on request. The person shall make available at his principal place of business, principal location, or principal address in California, or at a place mutually agreeable to the board and the person, a true copy of business records relevant to the amount, cost, and value of all property that he owns, claims, possesses, or controls within the state.

Prospective strategic plan.—Portions of a railroad's confidential corporate strategic plan dealing with possible future acquisitions were not reasonably relevant to a legitimate inquiry by the Board regarding assessment of the railroad's existing taxable property, and the Board therefore could not compel their disclosure. Only income from existing property may be capitalized under the income valuation method used to assess the railroad. Thus, the information was irrelevant, because possible future acquisitions could not affect the existing property's fair market value. Union Pacific Railroad Co. v. State Board of Equalization, 49 Cal.3d 138.

830. Failure to file statement. (a) If the request of the board is mailed before the lien date as defined in Section 722, the property statement shall be filed with the board by March 1, and shall be in such detail as the board may prescribe.

(b) If the request of the board is mailed on or after the first day of January following the lien date, the property statement shall be filed with the board within 60 days after the request is mailed.

(c) Except as hereinafter provided, if any person fails to file the property statement, in whole or in part, by March 1, or by that later date to which the filing period is extended pursuant to subdivision (b) or Section 830.1, a penalty shall be added to the full value of the assessment of so much of the property as is not timely reported as follows:

(1) For any part of the property statement relating to the development of the unit value of operating property, the penalty shall be 10 percent of the unit value.

(2) For any part of the property statement, not relating to the development of the unit value of operating property, that lists or describes specific operating property, the penalty shall be 10 percent of the allocated value of the property, which penalty shall be added to the unit value.

(3) For any part of the property statement that lists or describes specific nonunitary property, the penalty shall be 10 percent of the value of the property.

(4) If the failure to timely file a property statement is due to a fraudulent or willful attempt to evade the tax, a penalty of 25 percent of the assessed value of the estimated assessment shall be added to the assessment. A willful failure to file a property statement as required by Article 5 (commencing with Section 826) shall be deemed to be a willful attempt to evade the tax.

(5) No penalty added pursuant to paragraph (1), (2), (3), or (4) may exceed twenty million dollars ($20,000,000) of full value. In addition, if a penalty has been added pursuant to paragraph (1), (2), or (3), if a claim for refund seeking the recovery of that penalty has been filed by the state assessee contesting the penalty within three months of the due date of the second installment, and the state assessee initiates an action in the superior court within one year of the filing of the claim for refund, the state assessee is not subject to any further penalties on subsequent assessments for failure to comply with any subsequent request seeking information or data with respect to the same issue as set forth in the claim for refund filed within the time limits set forth above, until the assessment year after a final decision of the court, and then only with respect to a failure to comply with a request for information with respect to assessments after a final decision of the court. For purposes of this paragraph, "same issue" means the type of information that is the subject of the disputed request for information.

(d) Any person who subscribes to the board's tax rate area change service and who receives a change mailed between April 1 and May 1, shall file a corrected statement no later than May 30 with respect to those parts of the property statement that are affected by the change.

If that person receives a change mailed after May 1, a corrected statement shall be filed no later than the 60th day following the mailing of that change.

(e) Penalties incurred for filings received after June 30 may be included with the assessments for the succeeding fiscal year.

(f) If the assessee establishes to the satisfaction of the board that the failure to file the property statement or any of its parts within the time required by this section was due to reasonable cause and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the board shall order the penalty abated, in whole or in part, provided the assessee has filed with the board written application for abatement of the penalty within the time prescribed by law for the filing of applications for assessment reductions.

History.—Added by Stats. 1977, Ch. 147, in effect January 1, 1978. Stats. 1982, Ch. 1465, in effect January 1, 1983, in addition to making a number of grammatical changes, added subsection (4) to the third paragraph of subdivision (a), renumbered former subsection (4) thereof as (5), and substituted "(3), or (4)" for "or (3) of this subdivision" after "(2)," in subsection (5). Stats. 1985, Ch. 1091, effective January 1, 1986, substituted "twenty million dollars ($20,000,000)" for "five million dollars ($5,000,000)" in the first sentence of subdivision (a) (5) and added the second and third sentences thereto. Stats. 1986, Ch. 1457, effective January 1, 1987, substituted "March" for "April" after "by" in the first and second paragraphs of subdivision (a), substituted "that" for "such" after "by" and substituted "830.1" for "15620 of the Government Code" after "Section" in the second paragraph of subdivision (a); substituted "development" for "derivation" in subsection (a)(1) after "to the"; and substituted "nonunitary" for "nonoperating" after "specific" in subsection (a)(3). Stats. 1987, Ch. 498, in effect January 1, 1988, substituted "the state assessee shall not be subject to any further penalties on" for "the board shall not add any further penalties to any" after "refund,", and added "assessment" after "until the" in the second sentence of subsection (a)(5). Stats. 1990, Ch. 126, in effect June 11, 1990, added "If the request . . . Section 722," after "(a)", substituted "the" for "The" and deleted "annually" after "with the Board" in subdivision (a), added subdivision (b), added subdivision letter (c), added "subdivision (b) or" after "pursuant to" in subdivision (c), added "if" after "(3)," and substituted "the" for "a" after "set forth in" in the first sentence of subdivision (c)(5), relettered former subdivisions (b), (c) and (d) as (d), (e) and (f), respectively, and added "who" before "receives" in the first paragraph of subdivision (d), and substituted "that" for "such" twice in the second paragraph of subdivision (d). Stats. 2001, Ch. 407 (SB 1181), in effect January 1, 2002, added ", not relating to the development of the unit value of operating property," after "statement" in the first sentence of paragraph (2), substituted "may" for "shall" after "(4)" in the first sentence, substituted "is not" for "shall not be" after the third "assessee" in the second sentence, and substituted "that" for "which" after "information" in the third sentence of paragraph (5) of subdivision (c); and substituted "that" for "which" after "statement" in the first sentence of subdivision (d). Stats. 2011, Ch. 351 (SB 947), in effect January 1, 2012, added "in whole or in part," after "penalty abated" in the first sentence of subdivision (f).

Note.—Section 11 of Stats. 2001, Ch. 407 (SB 1181) provided that the Legislature finds and declares that the amendments made by this act to Sections 830 and 830.1 of the Revenue and Taxation Code are declaratory of existing law.

830.1. Extensions of times for filing. Notwithstanding Section 15620 of the Government Code, the board, by order entered upon its minutes and for good cause shown, may extend the time fixed for filing portions of the property statement as follows:

(a) For any part of the property statement relating to the development of the unit value of operating property, an extension not exceeding 45 days may be granted.

(b) For any part of the property statement, not relating to the development of the unit value of operating property, that lists or describes specific operating property, an extension not exceeding 30 days may be granted.

(c) For any part of the property statement that lists or describes specific nonunitary property, an extension not exceeding 30 days may be granted.

(d) If an extension is granted pursuant to subdivision (a), (b), or (c), an additional 15-day extension may be granted upon the showing of extraordinary circumstances which prevent the filing of the statement within the first extension.

History.—Added by Stats. 1986, Ch. 1457, effective January 1, 1987. Stats. 2001, Ch. 407 (SB 1181), in effect January 1, 2002, deleted "the" before "operating" in the first sentence of subdivision (a) and added ", not relating to the development of the unit value of operating property," after "statement" in the first sentence of subdivision (b).

Note.—Section 11 of Stats. 2001, Ch. 407 (SB 1181) provided that the Legislature finds and declares that the amendments made by this act to Sections 830 and 830.1 of the Revenue and Taxation Code are declaratory of existing law.

831. Information from local assessors. On forms and at times prescribed by the board, it may require the assessor of any county or city to report any information in his possession concerning the value of state assessed property.

832. Assistance from state agencies. The board may call on any state department, board, bureau, or commission for any assistance it can render.

833. Information held secret. (a) Except as provided herein, all information required by the board or furnished in the property statement shall be held secret by the board and by any person or entity acquiring this information pursuant to subdivision (c). Information and records in the board's office which are not required to be kept or prepared by the board are not public documents and are not open to public inspection.

(b) This section shall not apply to maps filed pursuant to Section 326.

(c) Except as provided in Section 38706, the board may provide any assessment data in its possession to the assessor of any county. When requested by resolution of the board of supervisors of any county, or the city council of any city which prepares its own local roll, the board shall permit the auditor or the assessor of the county or city, or any duly authorized deputy or employee of that officer, to examine any and all records of the board.

(d) The board shall disclose information, furnish abstracts or permit access to any and all of its records to or by law enforcement agencies, grand juries, and other duly authorized legislative or administrative officials of the state pursuant to their authorization to examine these records.

(e) The board also may disclose information, records, and appraisal data relating to state assessment of companies engaged in interstate commerce to tax officials of other states having duties corresponding to those described by this chapter. This disclosure shall be limited to instances in which there is a reciprocal exchange of information by the states in which the interstate companies operate, and shall be made only pursuant to a written agreement between the agencies involved. This agreement shall provide that any request for information be in writing, shall specify the information to be exchanged, and shall require that any information furnished be used solely for tax administration purposes and otherwise shall be held secret. This agreement shall also provide that any information furnished be disclosed only to those persons whose duties or responsibilities require access and shall require that necessary safeguards be implemented to protect the confidentiality of the information. The request for information and any written material furnished pursuant to the request shall be open to inspection by the person to whom the information relates at the office of the board in Sacramento.

(f) Upon receiving any request for confidential information from any person or entity described in subdivision (c) or (e), the board shall promptly notify the state assessee to which the request relates of the identity of the person or entity requesting the information and a description of the information sought. Upon sending any information in response to the request, the board shall simultaneously provide to the state assessee to which the request relates notification describing the information so transmitted and the identity of the person or entity to whom the information was transmitted.

History.—Added by Stats. 1943, p. 1997, in effect August 4, 1943. Stats. 1959, p. 3936, in effect September 18, 1959, deleted "Any," which was the first word of the section, deleted "The property statement is not a public document and is not open to public inspection.", added "Except as provided herein," and added the second paragraph. Stats. 1966, p. 669 (First Extra Session), in effect October 6, 1966, added the third paragraph. Stats. 1978, Ch. 826, in effect January 1, 1979, added "(a) Except as provided in subdivisions (b), (c), (d), and (e)," to the first paragraph of the section. The last sentence of the first paragraph of Section 833 was renumbered to "(b)". The second paragraph was renumbered to subdivision "(c)" and the third paragraph was renumbered to subdivision "(d)". In addition, subdivision "(e)" was added. Stats. 1979, Ch. 783, in effect January 1, 1980, restated subdivision (a) and added "and are not open to public inspection" after "documents"; and added the first sentence of subdivision (c). Stats. 1985, Ch. 1091, effective January 1, 1986, deleted "of this code" after "326" in subdivision (b); added "city" after "or the" and substituted "that" for "such" after "employee of" in the second sentence of subdivision (c); substituted "these" for "such" after "examine" in subdivision (d); substituted "This" for "Such" in second and third sentences of subdivision (e) and added the fourth sentence thereto; and added subdivision (f). Stats. 1986, Ch. 608, effective January 1, 1987, deleted "and the destruction of the information upon completion of its use" after "confidentiality of the information" in the fourth sentence of subdivision (e). Stats. 2001, Ch. 407 (SB 1181), in effect January 1, 2002, added "and by any person or entity acquiring this information pursuant to subdivision (c)" after the second "board" in the first sentence of subdivision (a).

Note.—Section 12 of Stats. 2001, Ch. 407 (SB 1181) provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

834. Destruction of records. The board may destroy any documents containing information obtained from taxpayers when six years have elapsed since the lien date for the taxes for which that information was obtained. Those documents may be destroyed when three years have elapsed since the lien date if the documents have been microfilmed, microfiched, imaged, or otherwise preserved on a medium that provides access to the documents.

History.—Added by Stats. 1966, p. 669 (First Extra Session), in effect October 6, 1966. Stats. 1998, Ch. 583 (SB 1103), in effect January 1, 1999, substituted "six" for "seven" after "taxpayers when" and substituted "that" for "such" after "for which" in the first sentence, and added the second sentence.

Article 6. State-Assessed Property Escaping Assessment*

861. Escaped property. If any property subject to assessment by the board pursuant to Section 19 of Article XIII of the Constitution escapes assessment, the board shall assess it in accordance with Section 864 at its value on the lien date of the year in which it escaped assessment.

862. Failure to file or report. When an assessee, after a request by the board, fails to file a property statement by the date specified in Section 830 or files with the board a property statement or report on a form prescribed by the board with respect to state-assessed property and the statement fails to report any taxable tangible property information accurately, regardless of whether or not this information is available to the assessee, to the extent that these failures cause the board not to assess the property or to assess it at a lower valuation than it would have if the property information had been reported accurately, the property shall be assessed in accordance with Section 864, and a penalty of 10 percent shall be added to the additional assessment. If the failure to report or the failure to report accurately is willful or fraudulent, a penalty of 25 percent shall be added to the additional assessment. If the assessee establishes to the satisfaction of the board that the failure to file an accurate property statement was due to reasonable cause and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the board shall order the penalty abated, in whole or in part, provided that the assessee has filed with the board written application for abatement of the penalty within the time prescribed by law for the filing of applications for assessment reductions.

History.—Stats. 1980, Ch. 1266, in effect September 30, 1980, added the third sentence. Stats. 1990, Ch. 126, in effect June 11, 1990, added "by the date specified in Section 830", after "statement", substituted "these" for "such" after "extent that", and substituted "if" for "had" after "it would have" in the first sentence. Stats. 2006, Ch. 538 (SB 1852), in effect January 1, 2007, added "had" after "the property information" in the first sentence and substituted "provided that" for "provided," after "the penalty abated" in the third sentence. Stats. 2011, Ch. 351 (SB 947), in effect January 1, 2012, added "in whole or in part," after "penalty abated," in the third sentence of the first paragraph.

863. Penalty. If any state assessee or his agent willfully conceals, fails to disclose, removes, transfers, or misrepresents state-assessed property in order to evade taxation and this action results in state-assessed property escaping assessment, or if any state assessee or his agent through fraudulent act or fraudulent omission or through collusion between the state assessee or his agent and the board, its officers, or employees causes any state-assessed property to escape assessment, a penalty shall be imposed as follows:

(a) Insofar as values escaping assessment are part of the unit value, 25 percent of the additional unit assessed value shall be added to the unallocated unit assessment.

(b) Insofar as the values escaping assessment relate to the assessment of nonunitary property, 25 percent of the additional assessment shall be added to the nonunitary assessment.

864. Entry on roll. (a) Property which is found to have escaped assessment may either be added to the roll for the fiscal year in which it is discovered or included with the assessments for the succeeding fiscal year. To the escaped assessment, there shall be added, in lieu of interest, three-quarters of 1 percent of the escaped assessed value for each month or fraction thereof from December 10 of the year in which the escaped assessment should have been enrolled to the date the escaped assessment is added to the board roll; provided, however, that an assessment in lieu of interest shall not be added if the escape was due to an error, other than an erroneous opinion of value, on the part of the board. The property shall be taxed at the rates applicable to assessments on the roll to which it is added.

(b) If the escaped assessment is made as a result of an audit which discloses that property assessed to the party audited has been excessively assessed for any year covered by the audit which falls within the period provided for corrections under Section 4876, the excessive assessments together with any assessment in lieu of interest under subdivision (c) shall be an offset against proposed escaped assessments, including accumulated penalties and additional assessments in lieu of interest. If the excessive assessments exceed the escaped assessments, including penalties and assessments in lieu of interest, the excess may either be credited to the roll for the fiscal year in which it is discovered or deducted from the assessment for the succeeding fiscal year.

(c) Whenever the excessive assessments were due to clerical errors or other errors by the board not involving exercise of judgment, there shall be added, in lieu of interest, three-quarters of 1 percent of the excessive assessment for each month or fraction thereof, from December 10 of the year in which the excessive assessment was enrolled to the date the excessive assessment is credited to the board roll or to the date the excessive assessment is deducted from the assessment from the succeeding fiscal year, as provided in subdivision (b).

History.—Stats. 1979, Ch. 516, in effect January 1, 1980, added the second sentence. Stats. 1982, Ch. 1465, in effect January 1, 1983, added "(a)" before "Property" at the beginning of the first sentence; deleted "assessment which has" after "to the", substituted "three-quarters" for "one-half" before "of 1", added "escaped" before "assessed value", added "or fraction thereof" after "month", added "escaped" before second "assessment," substituted "escaped" for "additional" before third "assessment", and substituted "an assessment . . . added if" for "no such addition shall be made where" before "the escape" in the second sentence of subdivision (a); substituted "the" for "Such" at the beginning of the third sentence of subdivision (a); and added subdivisions (b) and (c).

865. Property in more than one county. When the value of a state assessee's unitary property that lies in more than one tax-rate area has been underallocated to one or more tax-rate areas and overallocated by a like amount to one or more other tax-rate areas for any reason, the misallocation shall be corrected by the board either by orders directing local auditors to amend the rolls for the fiscal year in which the misallocation is discovered or by changes on the board rolls for the fiscal year succeeding discovery.

866. Statute of limitations. Any assessment to which the penalty provided in Section 863 must be added shall be made within six years of July 1 of the assessment year in which the property escaped assessment. Any other escaped assessment shall be made within four years of July 1 of the assessment year in which the property escaped assessment.

867. Creation of lien or charge on property. An assessment made pursuant to this article against real property for the year or years in which such real property escaped assessment shall not create or impose a lien or charge on such real property for taxes, interest, or penalty if (1) such real property has been transferred or conveyed to a bona fide purchaser for value prior to the date of such assessment and the showing thereof on the secured roll with the date of entry specified thereon; or (2) such real property is subject to a lien of a bona fide encumbrance for value created and attaching prior to the date of such assessment and the showing thereof on the secured roll with the date of entry specified thereon. In such cases, the tax collector may record with the county recorder of any county a certificate which shall set forth the name of the person who would have been the assessee in the year in which such real property escaped assessment and the amount or amounts of any such assessments and penalties. From the date of the recording of such certificate, a lien shall be created and shall attach against any real property owned by such person in the county or counties in which any such certificates may have been recorded, which lien shall have the force, effect and priority of a judgment lien.

The tax collector, with the approval of the board of supervisors, may at any time release all or any portion of real property subject to any lien created or attaching by the recording of such a certificate from such lien or subordinate such lien to other liens and encumbrances if he or she determines that the assessment or taxes are sufficiently secured by a lien on other property belonging to the person named in such a certificate or that the release or subordination will not endanger or jeopardize the collection of such assessment or taxes.

A written certification by the tax collector to the effect that real property subject to any lien imposed by the recording of the certificate as hereinbefore provided has been released from such lien or that such lien has been subordinated to other liens shall be conclusive evidence as to any bona fide purchaser, encumbrancer, or lessee that such lien has been released or has been subordinated as set forth in such written certification. Such written certification may be recorded with the county recorder of any county.

868. Extension of time for making escape assessment. If, before the expiration of the time prescribed in Section 866 for making an escape assessment, the taxpayer has consented in writing to allow an assessment after that time, the assessment may by made by the board at any time prior to the expiration of the period agreed upon. The period may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

History.—Added by Stats. 1983, Ch. 1281, in effect September 30, 1983. Stats. 1992, Ch. 523, in effect January 1, 1993, deleted "assessor or" after "cases, the" in the second sentence of the first paragraph; and added "or she" after "he" in the second paragraph.

Article 7. Penal Assessments of State-Assessed Property

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